Mitochondria and endoplasmic reticulum (ER) remain closely tethered by contact sites to maintain unhindered biosynthetic, metabolic, and signalling functions. Apart from its constituent proteins, contact sites localize ER-unfolded protein response (UPR) sensors like Ire1 and PERK, indicating the importance of ER-mitochondria communication during stress. In the mitochondrial sub-compartment-specific proteotoxic model of yeast, Saccharomyces cerevisiae, we show that an intact ER-UPR pathway is important in stress tolerance of mitochondrial intermembrane space (IMS) proteotoxic stress, while disrupting the pathway is beneficial during matrix stress. Deletion of IRE1 and HAC1 leads to accumulation of misfolding-prone proteins in mitochondrial IMS indicating the importance of intact ER-UPR pathway in enduring mitochondrial IMS proteotoxic stresses. Although localized proteotoxic stress within mitochondrial IMS does not induce ER-UPR, its artificial activation helps cells to better withstand the IMS proteotoxicity. Furthermore, overexpression of individual components of ER-mitochondria contact sites is found to be beneficial for general mitochondrial proteotoxic stress, in an Ire1-Hac1-independent manner. © 2022, The Author(s) under exclusive licence to [Cell Stress Society International.